-- Posted Tuesday, 27 June 2006 | Digg This Article
| Source: GoldSeek.com
Rick’s Picks
Tuesday, June 27, 2006
For investors who’d rather be smart than lucky
Do investors smell a 50-basis-point rate hike coming later this week? I wrote here yesterday that a “double-bagger” would be quite bullish for stocks, since it would mark a decisive end to a tightening cycle that has pushed the federal funds rate from a low of one percent exactly two years ago to a current five percent. Futures traders apparently expect the next boost to be just 25 basis points, just like the last 16, and they have priced fed-funds futures to reflect just a 12 percent likelihood of anything greater than that.
But what else could have caused equity investors to become so giddy yesterday? The Dow finished up 56 points on the day, and although that might seem at first glance like a modest performance, the rally occurred as crude oil prices were thrusting sharply higher (toward a hidden-pivot target, incidentally, whose precise – and short-able – location I have identified in the Current Touts section of Rick’s Picks).
Bucking Oil
Typically, share prices have eased when oil quotes have risen as sharply as they did yesterday. Also, in recent months Mondays have been pretty punk for equities. Yesterday, however, the Dow Industrials shrugged off Monday Morning blues to embark on a 75-point rally just as oil prices were starting to take off. With nothing obvious in the news to have triggered this spate of buying, it’s reasonable to infer that some other factor, not yet apparent, is breathing ebullience into the stock market.
Whatever the case, we’ll have a much better idea by Thursday, when the Fed goes public with its most recent decision regarding administered rates. Meanwhile, via the bulletin launcher intraday, I disseminated a bearish target for gold over the near- to intermediate-term. Although Comex futures recovered somewhat from their lows after oil took off, they did not rally quite high enough to negate the bearish outlook that I had detailed. I’ve provided a specific threshold to monitor, but unless it’s achieved we must continue to assume that the correction cycle begun on May 11 has further to go.
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Vancouver Seminar a ‘Go’
The Hidden Pivot Seminar in Vancouver is a definite “go” for the last weekend in October, so please let me know via-email if you’re interested in attending. The event is being produced by a long-time Rick’s Picks reader who wants to introduce his investment clients to my technical methods.
The two-day class is geared to teaching traders of all skill levels the rudiments of my proprietary Hidden Pivot System. Post-grad mentoring in a chat-room is included so that students can master the techniques learned in the classroom in a real-time setting.
Dates are not yet firm for seminars to be held in San Francisco and Sydney, Australia, but it looks like they will take place either in November 2006 or February 2007. Both classes are filling up, so let me know soon if you’d like to attend.
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Information and commentary contained herein comes from sources believed to be reliable, but this cannot be guaranteed. Past performance should not be construed as an indicator of future results, so let the buyer beware. Rick's Picks does not provide investment advice to individuals, nor act as an investment advisor, nor individually advocate the purchase or sale of any security or investment. From time to time, its editor may hold positions in issues referred to in this service, and he may alter or augment them at any time. Investments recommended herein should be made only after consulting with your investment advisor, and only after reviewing the prospectus or financial statements of the company. Rick's Picks reserves the right to use e-mail endorsements and/or profit claims from its subscribers for marketing purposes. All names will be kept anonymous and only subscribers’ initials will be used unless express written permission has been granted to the contrary. All Contents © 2006, Rick Ackerman. All Rights Reserved. www.rickackerman.com
-- Posted Tuesday, 27 June 2006 | Digg This Article | Source: GoldSeek.com
